The Federal Reserve trimmed its forecast for economic growth in 2013
The main concern Fed has is the fiscal policy has become more restrictive, and I think the Fed concern is justified. The impact of sequestration is only at the very beginning. We really still do not know how bad it will get yet. Investors are underestimating the political dead lock. The politicians simply did nothing and let sequestration happened. If they repeat that again for the current budget fight, we could be looking at a complete shutdown of the government after 3/27. The bad FedEx earnings report today should have sent a clear warning to investors, but many investors are apparently still not getting the warning sign yet. FedEx is the shipper for all other companies, and if FedEx is doing badly and worse than last year. That tells you how bad all other companies might be doing. This market bubble can pop anytime.
"The main concern Fed has is the fiscal policy has become more restrictive, and I think the Fed concern is justified."
Nonsense. Sequestration is a political game of one ups-manship. The size of these cuts are negligible despite the media's proverbial fanning the flames of political discontent by citing White House tours had to be stopped and that the defense department is worried about Homeland security.
For the Fed to try and peer into a volatile political crystal ball and make policy statements is simply a misguided and erroneous attempt by the debt masters to take even more control of our countries destiny.
It is not the amount that matters. It is the uncertainty the government created that matters. Ask any company that does business with the government or military, they are affected by all the uncertainties the political fights created tremendously. And the cut is real too. It may not matter to you, but if you are the one get the layoff notice due to the cut, then it matters to you.